Nurturing Green Innovation: The Remarkable Growth of Climate Tech in India

In recent years, India has witnessed a remarkable surge in the field of climate technology, addressing pressing environmental challenges while contributing to the global fight against climate change. This growth is fueled by a combination of factors, including the country’s commitment to sustainability, abundant natural resources, a burgeoning entrepreneurial ecosystem, and a policy environment conducive to innovation.

The global climate tech market was valued at $20.34 billion in 2023, an increase of 23 percent from 2022. The market is expected to experience considerable growth over the next decade to reach $183 billion in 2033, registering a CAGR of 24.5 percent during the forecast period of 2023 to 2033 as mentioned here. The growth in the climate tech market will be attributable to the increased awareness of the climate crisis and the growing urgency for providing solutions to mitigate climate change.

The market size for climate tech in India and Southeast Asia (SEA) in 2023 is $102 billion and is expected to grow to $350 billion by 2030, at a compound annual growth rate (CAGR) of about 20 percent.

According to “The Essence of Climate Tech for India and Southeast Asia” report conducted by venture capital firms Golden Gate Ventures and Venture East, Over $70 billion was invested in climate tech globally in 2022, with SEA and India accounting for approximately 7 percent of it. The funding, however, is expected to moderate to $36.2 billion globally in 2023, said in the report.

India, the world’s fourth-largest emitter of carbon emissions, faces a multitude of climate-related challenges, from rising temperatures to extreme weather events, mismanaged urban waste, and poor air quality. Recognizing the urgency, there has been a significant shift towards climate tech solutions that go beyond clean energy and encompass diverse sectors such as electric transportation, sustainable agriculture, waste management, and circular economies.

India currently ranks seventh in the Global Climate Risk Index and ninth in global climate tech venture capital funding. At the COP26 conference in 2021, India pledged to achieve net-zero carbon emissions by 2070, showcasing a commitment to transformative change. This ambitious target includes a 50% commitment to renewable power generation by 2030, non-fossil fuel energy capacity of 500 GW, and reductions in CO2 emissions and carbon intensity.

India’s rich endowment of natural resources provides a unique advantage in developing climate tech solutions. With vast arable land and substantial forest cover, nature-based projects focused on protecting and restoring ecosystems can contribute to carbon sequestration. Furthermore, India’s thriving entrepreneurial ecosystem, marked by exponential growth and a pool of talented founders, positions the country as a key player in the $3.1 trillion climate tech market opportunity by 2030.

In 2021, climate tech equity funding in India witnessed a significant 4x growth, reaching $7 billion, with total investments estimated at around $20 billion. The sectoral breakdown of investments highlights key areas of focus, including electric mobility, renewable energy, battery technology, and energy efficiency.

Electric Mobility: India, the fourth-largest automobile market globally, is witnessing a surge in electric vehicle manufacturing, charging infrastructure, and battery technology.

Renewable Energy: Proactive government policies and falling technology costs have led to substantial growth in utility-scale and rooftop solar solutions, supported by innovative startups in data analytics and site security.

Battery Technology: With a growing demand for clean energy storage, startups are innovating in alternative battery chemistries, leveraging machine learning for predictive maintenance.

Energy Efficiency: Startups are addressing inefficiencies in industrial manufacturing and commercial establishments through IoT sensors, promoting energy savings and sustainable practices.

Promising developments in technology, policy, and entrepreneurial innovation mark India’s journey toward becoming a climate leader as mentioned here.

Startup Funding Summary

Sarvam AI, Chennai-based generative AI startup, has raised $41 Mn in Series A funding from Lightspeed Venture, Peak XV Partners and Khosla Ventures – Read More

The Sleep Company, Mumbai-based mattress manufacturer, has raised $22 Mn in Series C funding from Premji Invest and Fireside Ventures – Read More

Biryani By Kilo, Gurgaon-based cloud kitchen startup, has raised $9 Mn in Series C funding from Alpha Wave Ventures, Vevek Ventures, DSP HMK Holdings, IvyCap Ventures, Incred Wealth and Clear Bridge Ventures – Read More

Digi Vriddhi, Bengaluru-based dairy fintech & marketplace platform, has raised $6 Mn in Series A funding from Omidyar Network India, Omnivore and InfoEdge Venture – Read More

Navadhan, Mumbai-based fintech startup, has raised $5 Mn in Pre-Series A funding from Prime Venture Partners, Gemba Capital and Varanium NexGen Fintech Fund – Read More

M&A Snippets

Kota-based edtech firm Allen Career Institute acquired Gurugram-based doubts solving platform Doubtnut for an undisclosed amount – Read More